Philip,

No doubt that diversification is a brilliant strategy to survive. 

Very few operators own patents to technology. The technology in the telecom space is largely owned by equipment vendors. Safaricom diversified from Voice into data, but did not need to develop their own 3G/LTE technology to do that. They simply deployed that technology that has been developed by other people. 

In order to survive telecom companies need to leverage the different technologies available, and deliver these as products to the consumers.

If there is a disruptive idea like mpesa, then this can be developed internally - or in collaboration with third parties. At one point though, it would probably be easier for the telco to license/buy that technology from a third party than continue developing it.

Also note that nowadays, telecom vendors also have mobile money products that could possibly deliver same functionality as Mpesa or even more enhanced features. 

Regards,
Tito






On 13 February 2013 12:58, Philip Musyoki <pmusyoki@gmail.com> wrote:
@Njoroge,
 
No one dispute's what Safaricom's core business is. But you can never hope to grow to a be a company of global consequence if you stick comfortable to your 'core' business.
 
Just to give you a few example I am sure you are familiar with:
 
Apple's core business was making computers for consumer. And when they saw demand for portable music player and later phone, the innovated their way in to new markets and now those 'new' product lines comprise a larger percentage of their revenues that the original 'core' business. Nokia may have fallen in to hard time, and using them may sound not proper, but their core business once was making boots. And later they because the largest cell-phone manufacturer, albeit for a brief fleeting moment.
 
Google's core business was search, that didn't stop them from working first on Chrome OS and later Android.
 
There many examples of companies that have grown out of their core businesses to be market leaders in newer business lines.
 
And very few have done it successfully through outsourcing everything. The core function of R&D and software development and services have remained with these companies.
 
I am not saying Safaricom is not already a good telecom company, it is. But they have saturated the market with their 'core' business and any future growth will have t come from new products and technologies. And these can better be developed in-house. They can outsource non-critical tasks like logistics and warehousing.

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